Liability of a Law Firm and Partners towards Clients
- A partner of a law firm shall be personally liable towards a client for the professional malpractice committed by him.
- Aside from the partner, the law firm in which he is a partner shall be liable for the professional malpractice.
- Other partners in a law firm shall not be liable for the malpractice committed by a partner, unless they jointly provided the service that gave rise to liability.
- A law firm shall be jointly liable for a clients’ damage caused by a non-partner staff of the firm.
- The creditors of a law firm may claim against all its assets.
- The creditors of a law firm may not claim against the personal property of the partners.
Obligations of a Law Firm
Without prejudice to obligations provided in other laws, a law firm shall have the following obligations:
- to purchase and maintain a valid professional indemnity insurance in addition to the professional indemnity insurances of its individual partners during its operation;
- to keep proper books and accounts;
- to keep the information of its clients strictly confidential;
- to be audited annually; and
- to comply at all times with this Proclamation, any other applicable law and professional codes of conduct; and
- to submit copies of amendments of its memorandum of association to the Federal Bar within 15 working days following the day of their signing.
Applicability of Other Laws
Other laws that are relevant for a limited liability partnership shall apply to law firms established under this Proclamation in as far as they do not conflict with the provisions of the Proclamation.
INSURANCE, CLIENT’S PROPERTY AND LAW OFFICE
Sub-section One – Professional Indemnity Insurance
Duty to Maintain Professional Indemnity Insurance
- An advocate shall maintain professional indemnity insurance in order to cover any potential liability for a client’s damage resulting from his professional malpractice.
- A law firm shall maintain professional indemnity insurance in order to cover any potential liability for a client’s damage resulting from its partner’s professional malpractice.
- The amount of the professional indemnity insurance shall be determined by the Bar, but it shall in no way be less than ETB….for each case of loss.
- The Federal Bar shall periodically revise the amount of the professional indemnity insurance to be maintained by advocates and law firms.
Duties of Insurer
- An insurer that has issued professional indemnity insurance to an advocate or a law firm shall immediately notify the Federal Bar of the termination of its insurance contract and of any changes to the contract that may negatively affect the coverage.
- An insurer shall be liable to a person for any damage sustained by the person as a result of its failure to discharge its obligation provided under Sub-article 1 of this Article.
A higher minimum coverage, possible exclusions of coverage as well as possibilities to limit a client’s right to claim damages due to his advocate’s negligence between the advocate and the client may be set out in the rules of the Federal Bar.
Sub-section Two – Law Office
An advocate can maintain a law office.
- An advocate shall provide the Federal Bar with the information required under Article for the purpose of registering a law office in the Register of Advocates set out in Article 19 of the Proclamation.
- An advocate who has a law office shall maintain the necessary facilities to fulfill all requirements provided in this Proclamation and other rules governing an advocate’s conduct.
- An advocate employed by a law firm does not need to maintain his own law office if he can be contacted under that law firm.
- An advocate who has a law office has all other rights and obligations that apply to an advocate.
Sub-section Three – Holding Client’s Property
- An advocate shall hold the property of his clients or third persons that is in his possession or under his administration in connection with a professional service separately from his own property.
- Complete records of such property shall be kept by an advocate and shall be preserved for a period of … years after termination of the professional service.
Property Other than Funds
Property of an advocate’s clients or third persons in his possession or under his administration other than funds shall be identified as such and appropriately preserved.
Client Trust Accounts
- Funds of an advocate’s clients or third persons in his possession or under his administration shall be kept in a separate account.
- The Federal Bar can require advocates to hold trust accounts that remit interests to the Ethiopian Interest on Advocates’ Trust Accounts for Access to Justice Program (EIATAAJP).
- An advocate shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the advocate only as fees are earned or expenses incurred.
- Upon receiving funds or other property in which a client or third person has an interest, an advocate shall promptly notify the client or third person.
- Except as stated in this Proclamation or otherwise permitted by law or by agreement with the client, an advocate shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render full account regarding such property.